Regional Round-Up
AirAsia seeking go-ahead for Indian LCC
March 1st 2013
AirAsia founder, Tony Fernandes, has confirmed India will be the last piece of its joint venture jigsaw with the launch, regulatory approval allowing, of a new Chennai-based, low-cost carrier by the end of the year. Read More »
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| AirAsia: India will complete its joint venture jigsaw |
Last month, Fernandes told the Wall Street Journal he would start “one more big one” in either China, India or Myanmar. “But we’re not close at this point,” he said.
A few days later, it was announced AirAsia had applied to India’s Foreign Investment Promotion Board to take a 49% stake in a new Indian airline with local partners Tata Group and Arun Bhatia.
AirAsia plans to invest between US$30 million and $60 million in the venture. Tata, which will take a 30% stake in the new LCC, also holds 6% equity in local LCC, SpiceJet.
More than 60% of India’s domestic market is controlled by LCCs, but Fernandes told media the market of 1.3 billion people was hugely underserved. “Malaysia has more aircraft than all the Indian carriers put together. This is despite the fact that India has 10 times more people,” he said.
AirAsia flies to Chennai, Bangalore, Kochi, Tiruchirappalli and Kolkata, in addition to 20 countries in Asia, from its bases in Malaysia and Thailand. Indian carriers must complete five years of domestic operations before they are eligible to fly overseas.
Last year, the Indian government raised the level of overseas investment in its airlines to 49%. If given the go-ahead, AirAsia will be the first company to be sanctioned under the new regulations.
Now based in Jakarta, AirAsia has subsidiaries in Thailand, Japan, Malaysia, Indonesia and the Philippines.
